Educate government officials and white-collar business professionals on the proper use of authority granted to employees and how to avoid becoming involved in a criminal investigation through training and compliance programs.
About the Author:
My name is Jim Keating. I attended college in Philadelphia, PA and law school in Wilmington, DE. Our team at Compliance Mitigation offers services to help people develop mitigation strategies that lead to lower sentences if they’ve been charged with crimes.
Upon completion of this Case Study, participants will be able to:
- Understand how employee conduct can lead to a criminal investigation;
- Explain how failure to put a compliance program in place can jeopardize a business’ longevity;
- Describe how to avoid investigations resulting from avoidable conduct;
- Understand how a sentence mitigation strategy can improve chances for departure from sentencing guidelines and prosecutor recommendations.
Government officials, small and mid-sized business owners and leaders, and other white-collar professionals.
Government Officials, Theft, Forgery, Misappropriation of Funds, Los Angeles County Bureau of Investigation, Sentence Mitigation Strategy
Current State of the Industry:
Most government employees ethically perform their work in meeting the objectives of their job descriptions. Occasionally, some of those same people face outside pressures and seek quick solutions without considering all the consequences that may result from their actions. County and Federal government agencies will investigate wrongdoing, intentional or otherwise. In this case, we see a former high school principal in Los Angeles who chose the wrong way to earn additional paydays.
Future State of the Industry:
Government sector employees typically have high ethical standards and have earned the dignity and respect afforded to them. However, occasionally a rogue government employee can take actions that could smear otherwise their good name and the profession in general. Government officials should take premeditated, careful, and calculated measures to avoid being involved in any criminal investigation. At Compliance Mitigation, we want to eliminate instances where government sector employees state that they did not know their co-worker’s bad decisions unwittingly resulted in someone being victimized, which certainly can be how federal government investigators view matters. Knowledge of consequences of poor decision making may result in people making better decisions and less vulnerable to investigations and prosecutions for white-collar crimes.
Former Los Angeles, California, high school principal charged with theft and misappropriation of funds resulting from payment received for unapproved use of school property. While the defendant has pleaded not guilty, government sector employees and leaders, as well as small business owners should learn from this situation. No one person sits above the law, and legislators in the United States have passed laws to facilitate fair use of government agencies property, like schools, and where taxpayer funds are at risk. Creation of complete and thorough compliance programs for your government agency, or for your business can help avoid being involved in a federal criminal investigation.
This case study profiles former Los Angeles, California, high school principal Kyle Douglas. All the information in this Background comes from a Los Angeles County Bureau of Investigation (LACBI) press release, and a newspaper article on the subject. According to the LACBI, Douglas has been charged with one count each of misappropriation of public funds, forgery and grand theft. Misappropriation of funds includes the separate crime of embezzlement. Misappropriation of funds involves embezzlement of money only. Embezzlement involves a person who has been entrusted to manage or control someone else’s property uses that property inappropriately, and for the person’s own benefit. Under current California law, the crime theft becomes Grand Theft when the value of the property stolen is over $950.00.
According to the LACBI, while employed as principal at Inglewood High School, Douglas negotiated a contract with a company for it to use the campus parking lot, noting that he did not have authorization from the school board to utilize school property in this manner. This transaction has been valued at $57,000. Two years later, while employed as principal at Woodrow Wilson Middle School in Pasadena, Douglas collected roughly $10,000 for a student trip to China but never paid the company that he hired to organize the school trip. Douglas recently pleaded not guilty to the charges and will have a preliminary hearing scheduled in the near future.
At this stage of the case, even though Douglas pleaded not guilty, prosecutors and investigators will continue to investigate the charges against Douglas. Douglas’ bad decisions now expose him to a loss of liberty, loss of time spent with family, and loss of financial resources. Felony convictions for Misappropriation of Funds bring with them the possibility of up to ten years in prison or more. Additionally, felony misappropriation of funds convictions can include fines and penalties that exceed $10,000. Under current California laws, a conviction for Grand Theft can be punishable by a maximum three-year prison term.
US history is replete with cases of government employee theft and misappropriate of funds. For example, an Illinois woman stole close to $54 million from the town that employed her as treasurer over a 22-year period. Another government employee in Maine has been convicted of stealing $500,000 from municipal tax receipts over a six year period. There are many more similar stories. Unfortunately, these crimes are not rare and while most cases do not feature the same kind of publicity-generating dollar totals, municipal theft will probably continue into the future.
At Compliance Mitigation we believe the problem begins with a lack of oversight, and a lack of written compliance procedures. Municipal theft and misappropriate of funds will likely never be fully eliminated, but at Compliance Mitigation we believe it can be minimized with a strong program of awareness and prevention. Top government officials must set a standard that bad behavior will not be tolerated and must make it clear, through publicly proclaimed policies, that misappropriation of funds from a government agency will not be tolerated. Top officials should also make clear that when discovered, dishonest white-collar professionals will be prosecuted to the fullest extent of the law.
From these policy statements, a well-constructed and comprehensive procedure, including extensive employee screening during the hiring process installs a culture that deters this type of crime. Regular training with Compliance Mitigation will further instill the culture these procedures outline and will certainly heighten awareness, which should be at the heart of any prevention program. Professionally written and promoted, these policies and procedures can be positive to employee morale and create a highly attractive work environment.
While the government employee being profiled in this case study has pleaded not guilty to the charges, other government officials, small and mid-sized business owners and leaders can learn from this situation. Government officials occasionally do things that are unethical or illegal. While the facts are not clear as to why Douglas allegedly misappropriated funds or stole school trip monies, crime will never be the answer to any unfortunate situation. Law-abiding people oftentimes turn to criminal behavior while not fully understanding or even contemplating the consequences to themselves or others.
With all the evidence the investigators seem to possess, it would appear that prosecutors have a strong case. Like most defendants, Douglas will likely plead guilty to avoid the downside of being convicted at trial. His best option now will be to craft an effective sentence mitigation strategy. That strategy should show the judge that Douglas has a full grasp of the crimes he committed. His sentence mitigation strategy should show empathy for the victims of his crime, show what he learned from the experience, and help the judge understand what steps he has taken to make things right.
At Compliance Mitigation, we recommend more training and better training for white-collar professionals to assist in their professional development. At Compliance Mitigation, we profile the personal stories of people that broke the law during the ordinary course of business as an example of what not to do. When people understand how authorities view crimes like theft and misappropriation of funds they may be more inclined to make law-abiding decisions. We like to say defendants are innocent until proven guilty. Training and education can assist every municipality and small mid-sized business employees and white-collar professionals to act in compliance with the law.
- Former Principal Charged With Theft, Misappropriating Public Funds | Los Angeles County District Attorney’s Office (lacounty.gov)
- Ex-principal charged with stealing tens of thousands of dollars (msn.com)